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this hour, president obama about to arrive in montana for a town hall event, ready to challenge what he calls myths about his health care reform effort. white house officials tell me prospects are changing right now, but not in the way you think. i'll talk with white house health care czar about that, about president obama's deal with companies and the strategy after the august recess. have the town hall gathering forced them to back away from the death panels? are republicans like sarah palin winning or losing? and does the president still have the communications mojo to make this work. i'll talk with paul krugman. good day. i'm john harwood of cnbc and

"the new york times." this is "the new york times special edition." on the front page this hour, president obama expected to arrive any moment in montana. at the end of this hour, he'll be holding his second town hall meeting on health care this week. you can see it here on msnbc. he'll hold another one tomorrow in colorado. he's trying once again to sell his plan to the people concerned about big government and price tags. no better place for that than big sky country. chuck todd is travel wg the president and joining us now from belgrade, montana. chuck, at the town hall meeting in new hampshire this week, the president didn't really get any nasty questions. are they doing anything different this time? does he want a little confrontation? >> they keep saying they do behind the scenes.

i was with a white house official in new hampshire at the time and in that person cringing that there weren't tougher questions. they were supporters who wanted to see him get tougher questions. they set the scene. they did a first come, first serve. they handed out two tickets per person, so they don't know who the second person is that's going to get this ticket. the likelihood you'll see as diverse an audience as you can get much higher i think than either of the system that they used, which wasn't open to the public system in new hampshire and the system they're going to be using in grand junction. >> what do you think is the target audience for the president? are they looking at the independent voters who helped the president carry states like montana in 2008? who do they want to reach? >> at this point, i think it's independents, but it's older

seniors. they did well enough with the senior vote, too. that's the number that is collapsing pretty much as fast as the independent number when it comes to this issue of health care and the president's handling of it and so look, they didn't -- they won't -- they won't say which came first. the decision to have a family vacation at the national parks or to have a couple of town halls and then tack on some vacation time, but boy, montana and colorado, two pretty good places to test out the independent message here a little bit. he had -- democrats have done really well out west over the last two years, but if you've looked recently and you consume polling as much as i do, this mountain west region, the president's job approval has gone down faster here than any other region than the south. this trip's very important to them. >> when you think about the two

target audiences, independents and seniors, how do you think they see their strategy with those groups? >> well, i think the senior group, that's why they're trying to do this debunking of myths. it's tough. i think they have a better shot at independents at some point, but it's not going to be with health care. they may not turn a corner with independents on health care now. the question is what do they do after this fight. my assumption, we've heard them hint at it before, they're going to try to tackle social security reform, entitlement reform, as sort of that olive branch to independents. they care so much about the deficit and size of government. with seniors, that's where they have to worry about first. if you're looking at this as a sort of -- what wound do you have to stop the bleeding with first, it's with seniors.

they could kill this thing. they've destroyed newt ging riches and bob dole's plans and could destroy the president's chances on health care. >> we'll watch that town hall alongside you. jeff zellny has been in the heart land all week checking out these meetings all week also by an advocacy group from virginia. jeff, talk about what you've seen. we've all seen the clips from the grassley town hall where he kept that death panel discussion going. how is that different than what you saw with tom harken and

leonard boswell. >> senator harken has an idea -- of pulling the plug on grandma, if you will. we've heard that over and over this week. one thing i was struck by was the over all civility of these meetings. they were certainly passions and intense questions, but regardless of which side of the issue people were on, there was much more civility than we've seen in other parts of the country and also a lot of local politics going on. >> does that mean boswell and harken were not getting the people in their face screaming at them? >> there was no screaming at any of the meetings i was at and congressman boswell, 60% of his

audience it seemed to me, was against this plan. he used his way to sort of slow down the conversation. in iowa, many of these people attending their meetings have a relationship with their member of congress or senator even if they're on the opposing view, so everything was civil here. but one thing i was struck by, i was picking up a lot of concern from democrats. there's a lot of sense for democrats how they should be reacting to this. they think the country's getting the wrong view -- >> what about the organizing for america town halls that you also went to? was that the place that would be ground zero for pushback by the white house? >> well, it perhaps was, but one of the first ones i went to in davenport, one man said, what are we doing here?

we're all democrats. shouldn't we be out there trying to change minds and votes? that's one of the challenges, sort of the outgrowth of the obama campaign movement is undergoing now, how they should take this on. they were criticized by having people go to members district offices, but what they're saying is they don't want to flood these meetings and create a confrontation, but there are some democrats who want the confrontation. the ofa group is still finding its way on this. >> clearly, a balance to be struck between trying to fight back, but also turn down the temperature, which a lot of democratic lawmakers want. for your bottom line here, is this a case where because of the pi pictures and images we've been putting on television this week, that america may have gotten a very distorted picture of what's happening in the heartland? do you think it's more of a placid disagreement, but not so

much anger? >> i think it's somewhere in the middle. certainly, the events i attended were much more mild than the events that made the news and were played again and again on youtube. as you drive across iowa, it's a long place from city to city, this issue is very hot on talk radio. i think at the end of the day, it would be mistaken that everyone is still boiling about this that they're at each other's throats. talking to some other senators in other districts in other places in the midwest, that's not the sense they were getting either. but no question people are very concerned about this. >> thanks for that. the white house right now is fighting to be heard above all the noise from opponents of president obama's goals for health care. birthd besides the president's town

hall, the white house will be talking to senior citizens who are concerned about what might happen to medicare. the director of the office of health care reform joins us now. nancy, let me get your impression at the moment of how the first two weeks of the august recess is going. are you gaining or losing altitude? >> i think we're gaining because every time the president gets out there and talks to the people about what they're experien experiencing, the kinds of people he'll be talking to today who have had insurance companies cut them off, that's when people will understand what this fight is all about. >> i've talked to some of your colleagues in the white house in the last 24 hours and what they're telling me is in fact, this effort is a lot healthier than perceived, but the bipartisan talks that chuck

grassley and max baucus have been carrying on are not likely to succeed and the democrats are pulling together and will come back in september and pass this. is that how you see it? >> i'll say this. the congress has worked very hard and have gotten a lot done. four out of five committees have already reported bills out and there's one committee still working. that is the senate finance committee. they've been hard at work on a bipartisan effort. i would say that they work extremely hard, but it's clear that the republican leadership is firmly against any kind of reform going forward. i think that makes it really hard for those at the table to move forward. >> which gives me the next question. it goes to grassley's statement the other day. he's taken out the so-called death panel provision.

we know a lot of that talk is ridiculous. on the other hand, it has created a lot of concern in some segments of the country. if you then turn away from bipartisan negotiations, is the provision on the end of life counseling going to stay in because you believe in it or come out to avoid controversy? >> there is a health committee bill and senator isaacson offered on this subject. i was surprised to hear senator grassley's comments. clearly, you say there are some pretty ridiculous things going on and not only ridiculous, but cruel. their families want them to have more control and make sure their wishes are respects and that's what this is about. >> so from the white house point

of view, the provision will remain in the bill? >> well, i think he had two amendments, one he finally withdrew, that would have required medicare beneficiaries to have end of life advanced directives before they could be admitted into medicare. i think he withdrew that. so another provision that applies to people more broadly. i believe that was accepted by unanimous consent. i can tell you this. there's no provision in any of these bills that the president would accept that would have anything to do with rationing care or death panels or anything like that. >> one more quick question. the deal with pharma, the drug companies on reducing their costs. is that open to more discussion on things like negotiating drug prices or is that a settled issue? >> what the pharma deal is about

is getting medicare beneficiaries to hit that donut hole. it's giving them a discount and reducing medicare and other spending on drugs. it was $80 billion to be contributed for saving money toward health care reform. >> drug prices -- still an open issue? >> both we and pharma agreed that wasn't a subject we'd discuss. >> thanks so much. and coming up, paul krugman tells us why he thinks a lot of the recent criticism for president obama actually has nothing to do with the president's performance in office. and later. destination, china. why a lot of resent college graduates are heading to the far east for their first job. whe. ...or if you're already sick... ...or if you lose your job. your health insurance shouldn't either. so let's fix health care.

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welcome back to the "new york times special edition." now, it's time for op edge. first up, in the unfunny truth, the times new columnist checks out the flick, "raunchy people." he writes -- next up, the "times" frank rich

asks is obama punking us. he writes -- and in republican death trip, paul krugman takes a look at the gop and its tactic. paul krugman writes -- paul krugman joins me live now. paul, thanks for being with us and let me ask you about health care reform in particular. what i hear from democrats is that all of this trash talk at town halls is making them more likely to pass an all-democratic

bill. are you skeptical they can do it? >> there is a question of how much you can do through reconciliation process because we don't get -- you have to hold all 50 senate democrats to do that without using reconciliation, so i don't know, but look, if the reaction is my god, if this is what the opposition is like, then we should be in favor of what the president's proposing. that's a good thing. the worst thing, not just on health care, but for the country as a whole, this could be, politically. >> as somebody who cares about over the long-term if not the short-term, levels of federal spending, what do you think is the right way for liberals and progressives to talk about limiting end of life care, which a lot of the people agree is hugely expensive without adding materially to the quality of life to the patients. >> there are two different issues here.

one is that we spend a lot in the last months of life, which is true. but you have to bear in mind, you don't know it's your last month in life. we're always going to spend a lot of money trying to save someone who is very, very sick. the other story though, the idea that you should have some kind of end of life provision, that people should voluntarily make, enter into agreements about how they should be treated, that did have broad bipartisan support so that you have newt gingrich saying what a great idea that was. sarah palin last year signed a proclamation saying we ought to have these directives. >> progressives should not be scared of having that conversati conversation? >> it's not really about what it's about. it's not actually about the end of life provisions.

it's not about this specific bill. if they're just going to grab on to anything and try to turn something, they saw this. it seemed to have something to do with end of life, so they said, death panels. it's not about the substance so that means you can't satisfy is crazies. they hate the whole idea of any kind of health care reform and of democrats in the white house. >> our problem now if we tell some of the republicans in the senate, you can have everything you want in the bill and they still won't vote for it. thanks a lot. coming up, health care reform and the debate over death panels. we're also watching the president's health care town hall in montana. we'll bring it to you live as soon as the president takes the stage. this is "the new york times special edition" only on msnbc.

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...or if you're already sick... ...or if you lose your job. your health insurance shouldn't either. so let's fix health care. if everyone's covered, we can make health care as affordable as possible. and the words "pre-existing condition" become a thing of th. we're america's health insurance companies. supporting bipartisan reform that congress can build on. we're back. just minutes away from the president's arrival at his latest town hall meeting. this one in belgrade, montana. he holds another tomorrow in

grand junction, colorado. i'm john harwood. it's time for "the caucus." joining us now from "the new york times," defense correspondent and national correspondent. you had a fascinating graphic today. looking at the orgin of this rumor. we know that betsy mccoy played a big role in taking down the clinton health care initiative in 1994, but i was surprised to see john boehner played a role. talk about what he did and what happened after that. >> john, the rumor had its orgins in conservative media outlets after the election of

president obama. >> even though as you point out, johnny isaacson is the one who put that in the bill. >> right. but the rumor didn't get wide attention until the house unveiled its bill in mid-july, saying that, and the provision would provide authorized medicare to finance optional consultations for -- >> voluntary. >> optional consultation for end of life services. a week later after the house bill was unveiled, house republican leader john boehner along with thaddeus mccotter issued a statement saying that the -- >> talking about denying nutrition. >> and said that this provision could start, pave the way for

government-sponsored euthanasia in the future. >> talk about the impact of this and whether you think this in fact is driving the debate or are people saying you know what, this is bogus. >> this is an attack that has legs. part of that reason is death panel is a phrase that everybody can understand. it's graphic and scary, but we shouldn't be so quick to dismiss that. it's a slippery slope argument that once you've got the government making decisions about health care spending, then it's possible that at some point, you could have a panel of people saying this procedure for this person is too expensive relative to the game. >> mark, you've encountered as i have, the whole issue, end of life directives and the tough choices that people have to make when they are dealing with end

of life care? >> sure. absolutely. these are issues that hit most people and they're easy to relate to people. i think that's why you get some traction and have these vigorous debates. a lot of times, white houses are paranoid about having the critics up front. i don't know how he's being judged this week in his performance, but it is interesting that they're choosing the strategy. we know that emotion is a huge part of driving political attitudes and fear is a big part of it. you wrote this week about a difference fear issue. it has to do with terrorism and the war against terrorism and the way in which the government quietly went about constructing

prisons to house terror suspects. >> the article was sort of about the inside detail of how the cia builds prisons. they go to alleyed countries and talk to intelligence services. then the sort of how it works inside the cia to actually build a prison. >> like franchising outlets. >> absolutely. you go to walmart, target, you buy plumbing supplies. then the case of the number three person at the cia and how he relied in part of his old buddy -- the duke scandal. both ended up going to joil and how wilkes helped him get these supplies. these are all single-source contracts, is he getting

kickbacks. to be fair, he did not go to jail for this particular prison project. >> let me get a quick answer to the updated version of the war on terror and that's in afghanistan and pakistan. you wrote this week about the killing of a taliban leader in pakistan. how big a deal was that for a broader effort in the region? >> mehsud was the leader who was directing attacks on pakistan. it was important that the u.s. take this individual out and the u.s. is hoping that in turn, they'll go after militants and even plotting against western targets. >> thank you so much. coming up, sam has a piece on what the health care debate looks like from england. plus, we're watching the president's town hall in montana.

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2 for $20! only at applebee's. you're watching live coverage on msnbc. air force one has just landed in belgrade, montana, for a town hall on health care set to begin in just a short time. joining us now, sam tanenhaus. sam, you've got a big piece of health care coming out this week. talk a little about that. i understand it's a view from england about what's going on in the united states. >> that's right. great correspondent, placed in england, is looking at how the british are assessing our health care debate. some will remember the notorious assertion made in the american

media that at stephen hawking were subjected to british health service, he would not be alive today. he lives in england. >> at the white house, this week for a medal of freedom ceremony. >> that's it. and part of the idea here is that this british grumble at the system they've got until somebody else attacks it. so now, they're looking at it again. we'll show how our debate looks to them. >> i want to switch gears. i know you've got a book coming out in september and you know a lot about the patron saint of modern conservatives. what do you suppose bill buckly would think of the nature of the arguments being made right now, death panels and all the rest? >> one of the great contributions he made to conservatives was to move it toward the center.

one way to do that was to reputeuate the lunatic fringe. john burke society was a very powerful organization in the '60s and its leader had called eisenhower a communist. what they did was discredit serious conservative argument and we may see where there is responsible republican and conservative thinkers, if they're going to make a forceful argument the country can accept, they'll have to cut themselves off from this view. >> it's an interesting point. i don't see right now anybody cutting off that extreme view all that much. thanks for being with us. when we come back, we'll see president obama come off that plane and approach that town hall in belgrade, montana. you're watching msnbc. the place for politics. so? you were right. these healthy choice fresh mixer thingys, taste fresh... say it again! they taste fresh.

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you're watching live coverage on msnbc. air force one has just landed in belgrade, montana for a town hall event set to begin at any time. we're waiting to see president obama come out of air force one. this is friendly territory for him. a state he carried in 2008. in 2006, montana elected john tester, another democrat, to the senate. it's sort of ground zero for some of the changes for the obama era. it's also the home state of max baucus. we heard chuck todd say that the president may be hoping and by ticketing this event on a first

come, first serve basis. here's president obama coming out. you can see him holding the hands of one of his daughters and michelle obama and his other daughter is coming down the stairs right now. dressed casually, no tie, which makes sense given they're on vacation. he's about to shake hands -- there, he's shaking hands with max baucus. he just passed the governor of montana there. here's john tester, the recently elected senator who was elected in 2006. and the president is hoping to get challenged a little bit directly so he can knock down some of what he thinks are myths about health care reform. they ticketed the event to try to make that happen, giving out two tickets to everybody who showed up, so there could be some mystery guests show up. this is really a critical moment for barack obama in health care

reform. this is his first year to try to get this. we have seen presidents' political capital diminish after they get to their first year. they staked the success of his presidency on getting health care reform, for trying to change the underlying economic basis of the country and to resolve a problem that's bedevilled democrats for 70 years now. harry truman tried to get health care reform. franklin roosevelt tried to get it. this new, young president is working this very hard and we talked earlier in the hour to nancy-ann deparle, the director of the office of the white house on reform and we're -- for the

president to expect chuck grassley to make a deal with max baucus and perhaps get a bipartisan deal that could pass the senate. looking more and more likely that this is going to be a democrats-only enterprise. she indicated the white house may not be backing off of these end of life counseling provisions that some of the opponents have been attacking on talk radio and some of these town hall meetings. it's also possible that an all-democratic bill could move more to the left on issues like the public option, which is something very important to members of the democratic caucus in the house and most members of the democratic caucus in the senate, even though it's difficult for some moderates to vote for. you see the president moving down the line with his family, enjoying the great outdoors,

heading toward his motorcade and heading into that town hall in a few minutes that we'll be watching live on msnbc. that's it for this hour. i'm john harwood. david schuster and tamron hall pick things up next and i'll join me as they cover the president's town hall event in belgrade, montana. we'll bring you that live as soon as the president takes the stage. this is msnbc. the place for politics. over a million people have discovered how easy it is to use legalzoom for important legal documents. at legalzoom, 'll help you incorporate your business, file a patent, make a will and more. you can complete our online questions in minutes. then we'll prepare your legal documents and deliver them directly to you. so start your business, protect your family, launch your dreams. at legalzoom.com we put the law on your side. they say imports always get the best mileage. well, do they know this malibu

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just a good paying job. that's why i like this clean energy idea. now that works for our whole family. for the kids, a better environment. for my wife, who commutes, no more gettin' erked around on gas prices... and for me, well, it wouldn't be so bad if this breadwinner brought home a little more bread. repow america. i hope our senators are listening. when she started rgetting things, i was hoping it was nothing. grandma! what a nice surprise! mom, it's sunday. that's when i knew i couldn't wait. mom's doctor said these were signs of alzheimer's, a type of dementia, and that prescription aricept could help. he said it's the only treatment proven effective... for all stages of alzheimer's. studies showed aricept slows the progression... of alzheimer's symptoms. it improves cognition... and slows the decline of overall function.

aricept is well tolerated but not for everyone. people at risk for stomach ulcers... or who take certain other medicines... should tell their doctors... because serious stomach problems... such as bleeding may get worse. some people may experience fainting. some people may have nausea, vomiting, diarrhea, bruising, or not sleep well. some people may have muscle cramps... or loss of appetite or may feel tired. in studies, these were usually mild and temporary. mom. talk to your doctor about aricept. don't wait. alzheimer's isn't waiting. what you're looking at is the area where the president will be speaking at the town hall on health care reform in belgrade, montana. that is the gallatin field airport hangar, where a little bit more than a thousand people are expected. he is also holding one out west tomorrow. good day, everyone. i'm tamron hall, live in new

york. >> i'm david schuster in washington, d.c. the white house is hoping to get out in front of this health care debate instead of playing defense. this recess has been somewhat of a challenge for the president's plan to overhaul health care reform for a number of reasons. including a key republican has been singing a different tone. just last week, senator charles grassley of iowa said he was confident president obama was working towards a bipartisan bill, but now he's claiming he's not being included in the talks and the democrats are pushing ahead with a partisan bill. >> and there's always the side of these rowdy town halls. some democratic law make rs are being hounded and some have been very vocal, but democrats are fighting back. they're launching an all-out pr blitz to let americans know not

all town halls are out of control and bill clinton says the battle is not over. he's urging voters to help president obama get this legislation through congress and telling democrats not to lose their nerve, and that's a quote. >> he's holding this town hall at the airport hangar in belgrade, montana. it was named after the serbian city in the late 1800s because of the investors on the railroad. they named this little railroad stop belgrade. tickets were handed out first come, first serve, so there is every hope there will be a wide variety of questions, perhaps some sharp criticism and wild claim. some white house officials believe that in that environment, the president can be at his best. we're joined by chuck todd and john harwood.

and jonathan capehart is from "the washington post." chuck, let's start with you. the idea that the president may be able to leverage the emotion against him, explain how the white house would like this to work. >> if they think, they're not afraid of it. one official said to me, we're not looking for somebody to yell at us. nobody searches out for that moment. at the same time, they don't fear it. i don't know if they're really going to get it. i go back to this observation of the protesters watching in new hampshire. there wasn't angryness and yelling. and how people acted on the inside including one of the gentleman who asked a question that was somewhat critical and how he had an easier time talking to me than he did when he was actually asking the president a question.

it can be an intimidating environment. they are hoping for a wide variety of questions. one thing, david, i don't think the president is going to go out of way to answer questions from 11-year-old girls. one of the things that they set themselves up for for criticism is on that question. i was with some white house officials and they were cringing. they were like, you know, get out from beyond the bicycle rack crowd. you'll see in this town hall -- i don't mean by 11-year-old girls. the people closest to the president are more likely to be supporters. it's the people outside the security perimeter that are open to the public. >> looking at our live video, you see this woman standing with the curly hair, it's the president's picture from "time"

magazine. let me bring john harwood in. you've got people ask the question, are the democrats losing august. we're only on the 14th day of this month and the question was asked of robert gibbs whether some of the polling is a reflection of how these town hall and the misconceptions might be taking over the conversation. >> i think barack obama can safely assume he's gotten out of gun rack territory away from bicycle rack territory in montana. i don't think it's clear at all that democrats are losing this war. they're not doing well with republicans, okay, but there's a huge partisan difference. eight out of ten democrats still approve of what obama's doing. a senior white house official told me this morning, we have the votes right now to pass the house leadership plan right now, at least we did